Logica axes 1,300 jobs as profits set to be just £240m
225 to go in Blighty
Logica is cutting jobs across Europe as it tries to sell its wares in the increasingly gloomy IT services market.
The company warned that it expected profit to now be in the range of £240m to £250m for the year, while Logica's revenue growth prediction for 2011 has also shrunk.
It now expects a climb in sales to be around the 3 per cent mark, compared with an earlier forecast of 5 per cent for the year.
Logica has been struggling to shift its order book from the public sector toward the commercial markets, after the firm's first half-year squeezed margins and deflated operating profits.
The company, which has a global workforce of 41,000, is now admitting that the outlook is much more uncertain and that means jobs will be lost.
It's cutting loose around 1,300 employees at a restructuring cost of £93m.
Jobs in the Netherlands, Belgium, UK and Sweden will be axed, Logica said, with around 225 staff being let go in Blighty alone.
"We deeply regret the impact job losses will have on the people affected in many of our businesses. But we are confident that it is best for our clients, people and shareholders that we face squarely into the difficult economic conditions ahead," said Logica CEO Andy Green.
"This decisive action will result in sustainable margin improvement in 2012, with the benefits starting to flow through in the second half. It will also ensure that a strong Logica can concentrate on helping clients to use technology to cut costs and serve their customers better." ®
"The company warned that it expected profit to now be in the range of £240m to £250m for the year"
Only £240-250 million profit in the middle of a recession? I don't know how they sleep at night.
I know! Lets make a load of staff redundant! The best ones will leave if we offer VR, and the ones that are left will be so demoralised they will doubtless put extra effort in! That should maximise shareholder value nicely!
One of the many reasons I left...
...and haven't looked back. I survived 3 mergers & the concomitant job culls, and endless years of pay freezes, deep discord at the grass roots level due to blind, permanently disconnected management, etc... and in the end went when the opportunity arose (not VR incidentally).